Journal of Industrial Economics最新文献

Final goods are typically produced using multiple complementary inputs. We examine the incentives and implications of supplier encroachment incorporating this fact and allowing for the possibility of mutual outsourcing between the encroached supplier and the incumbent. We show that mutual outsourcing can occur when both firms are present in the final good market. We also show that, unlike the single input case, the supplier refrains from encroaching when mutual outsourcing results in high wholesale prices and that encroachment can benefit the incumbent by generating input sales. Finally, we show that nonlinear contracts play a significant role for encroachment.

We analyze alternative ways to assign the default position for digital goods like search engines. When two competing firms vie for the default through bidding, the higher-quality firm typically wins but delivers lower utility than the rival due to heightened monetization from exploiting consumer switching costs. The distribution of consumer switching costs plays a crucial role in driving the bidding outcome and welfare results. Paradoxically, increasing via regulation the rival's default share tends to raise profit and harm consumers, at least in the short run. Letting consumers choose the default benefits them in the short run, but harms the weaker firm.

We model a duopolistic game where firms first choose the direction of their innovation, then invest in the chosen direction, and finally, compete in the product market. Investments occur either in overlapping or non-overlapping territories. We show that, in the presence of a generous patent regime that allows the protection of innovations of little value, firms tend to invest in overlapping technologies; stricter requirements for patentability may induce firms to operate in different technological areas, thereby increasing market efficiency. We illustrate our general theory using two stylized models of Cournot competition with product and process innovations, respectively.

Competition in gasoline retailing is characterized by intraday price cycles in local markets worldwide. The literature describes these as corresponding to the well-known Edgeworth cycles. Previous research has mainly focused on analyzing cycles based on hourly, daily, or weekly average price data. We study the cycle initiation based on second-by-second data for one German town. We find that price considerations are not the main factors in determining which retailers raise prices first, how much they raise them, or whether they succeed. Brand affiliation is more important, and to a lesser extent, so are the services offered and location parameters.

This paper examines price discrimination by consideration in an oligopoly with nested reach. Consumers obtain a ranking of the firms and consider them consecutively, differing in how far down the list they go. A firm's product matches a consumer's preferences with an exogenous probability. In sufficiently asymmetric markets, under both uniform and discriminatory pricing, in equilibrium, competition is duopolistic: only two firms use any price interval. Firms face pricing trade-offs due to consideration heterogeneity. Price discrimination alleviates these trade-offs, but it intensifies competition. Compared to uniform pricing, it reduces industry profits and benefits consumers. In this setting, limitations on the use of consumer data may benefit the industry at the expense of consumers.

Policymakers have expressed concern that when a dominant online platform acts both as a marketplace and as an active seller, it might disadvantage its rival sellers and thereby harm consumers. I examine whether platform competition might be promoted to protect consumers. Perhaps surprisingly, I find that increased platform competition can reduce seller competition, and thereby harm consumers.